Business is Growing! What to Watch For Now

Michael Gallagher, .

woman at whiteboardCongratulations! You’re in the enviable position to which all entrepreneurs aspire. Sales are up, you need to hire people, life is good. But of course there are key elements to effectively manage this growth.

“Knowing what needs to change and what you yourself need to stop doing is critical to your ongoing success!” In his book, “What Got You Here Won’t Get You There“, Marshall Goldsmith discusses the need to learn and adopt new skill sets even as you are achieving success. You wouldn’t expect to be doing the same work if you received a promotion in another job. In the same way, the demands of your growing business have just promoted you out of your smaller business and the job has changed. Managing more ….. more production, more customers, more supply chain, more employees is very different from your previous role. Knowing what needs to change and what you yourself need to stop doing is critical to your ongoing success! Here are the must-dos:

 

  • Establish functional supervisory responsibilities for each operational business area and a direct reporting process to manage them
  • Develop performance objectives tied to your growth plan for each supervisory area. No growth plan? You need to address that now.
  • Provide training where knowledge gaps are identified between required skills sets and previous experience
  • Understand that the primary function of senior management (owner, president, general manager) is to manage the supervisory function, assess and manage financial results and develop those external relationships necessary to your business’ continued growth and profitability
  • Identify those lower value tasks you can no longer do yourself as you did when the business was smaller. By whom and how they will be done must be carefully implemented.

New hiring and training should be done with a view to supplementing and expanding the capacity of the business as it grows to meet its potential (Yes – back to the plan!). What new skills are required and which current skills need to be brought to a new level of competency? Are your customers still as thrilled with your product or service as they were when you were smaller? Don’t lose touch with them now.

Finally, and most critically, manage your margins. Higher revenues and the costs of accommodating growth can sometimes conceal the fact that your product profit is not being maintained and less of those growing revenues are making it through to the bottom line. If you’re not keeping more of the money growth brings, then what’s the point?

Implementing some of the ideas mentioned here can be challenging. If you would like to discuss them in the context of your own specific business please contact us. We’d be glad to help.

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Michael Gallagher

Mike Gallagher, President of Michael Gallagher Advisory, has spent the past 20 years helping small business owners and managers develop and implement strategic business plans, achieve sustainable, targeted growth and solve the problems that keep them up at night.